Ramaphosa’s plan for radical economic transformation and tackling unemployment

Deputy-president Cyril Ramaphosa has outlined some of his key plans for the South African labour market for the remainder of 2018 and beyond.

Speaking at the Nedlac Labour School in Pretoria on Tuesday (30 January), Ramaphosa said that the key priority was the creation of decent work on a scale that makes a decisive impact on poverty and inequality.

This will require far higher levels of economic growth and sustained investment by both the public and private sectors in productive economic activity, he said.

“As we found in Davos last week, many investors are prepared to work with us and our people to build our country,” Ramaphosa said.

“They have expressed a renewed confidence in South Africa and are looking to invest in our country and contribute to employment creation.

“Fundamentally, we must use 2018 to restore the confidence of South Africans in a shared vision for radical social and economic transformation.”

Radical social and economic transformation

Ramaphosa said that a core part of this renewed focus on the labour market will be to “convince those who have not yet understood”, that it not possible to grow and sustain an economy that excludes black people – the majority of whom are African and female.

“Radical social and economic transformation is about creating a South Africa where all its citizens, black and white, share equitably in the country’s economy,” he said.

“It is about implementing programmes that deracialise ownership and control of our economy to benefit South Africans as a whole.”

A key part of this will require changing the ownership structure of the economy, Ramaphosa said.

This will include:

  • A new mandate given to the competition authorities to promote competition and eliminate monopoly control.
  • Increased capital and support contributions through the black industrialists programme and the R1.5 billion small business fund established through the CEO initiative.
  • Pursuing policies that support the inclusion of black people in the ownership of financial institutions.
  • New changes which will see the broadening of black economic empowerment policies to promote greater worker ownership and board representation.

Unemployment

In tackling the country’s large youth unemployment rate, Ramaphosa said that a “social compact” was needed between workers and industry, as many South Africans that have an education and skills continue to face marginalisation in the economy since many employers prefer experienced workers.

“This year will see the implementation of the Youth Employment Service, which has the potential to revolutionise the absorption of young people into the labour market,” he said.

“The result of collaboration between social partners, this initiative aims to place a million unemployed youth in paid internships over the next three years.”

Other factors Ramaphosa is looking at addressing include:

  • The implementation of free higher education as a means of including South Africa’s unemployed youth.
  • The implementation of a national minimum wage – which will help reduce income inequality and contribute to a more cohesive society.
  • A renewed focus on the mobilisation of workers on the factory floor against poor governance, unaccountability and impunity.
  • Addressing financial, operational and governance weaknesses at state owned enterprises and ensure better use of public resources in areas like infrastructure, education and health.

Read: Ramaphosa speaks Zuma exit and corruption at Davos

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